Story by Michael Chihak

last updated December 20, 2012

The increase came because of significant gains in retail sales taxes, up 9.2 percent from last year, the largest such increase in 16 months, the report said.

The increases kept 2012-13 revenues running ahead of the budgeted forecast by $19.8 million, and that was 4 percent ahead of last year.

The state has operated at a surplus in the last year and a half, ending the 2011-12 fiscal year with a $450 million reserve account and an additional $380 million in "carry-over" cash.

Republicans who control the Legislature have said that cash will be needed to cushion the state against potential economic downturns and to help cover revenue losses when the temporary one-cent education sales tax expires.

Democrats have said the state has cut too much from education, health care and transportation and needs to begin restoring some of the funding.

The Joint Legislative Budget Committee reports on state revenues each month and uses those figures plus projections from a panel of financial and economic advisers to make budgeting and spending decisions.

Gov. Jan Brewer has her own budget staff and economic advisers. Their figures sometimes differ from those of the Legislature. Last year, they were predicting higher revenues than the legislative staff, and the figures so far have been closer to the governor's office's projections.

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